The Cure That Works: A Look at Singapore and the United States' Healthcare Systems
Introduction
Dr. Sean Flynn’s book, The Cure that Works pits the United States healthcare system versus the healthcare system in Singapore. In his mind, there is not much competition for this battle of healthcare. To give background for this match, the United States pays around 18% of its national GDP towards healthcare, while Singapore only pays around 5%. This means that Singapore on average pays 13% less than the United States on healthcare. However, the quality of services provided in Singapore are better than that of the United States. The example Dr. Flynn uses is with birth. In the United States, mothers are 7 times more likely to die during childbirth than in Singapore. The child are 3 times more likely to die. Even though Singapore pays less to upkeep its healthcare, the quality of it has not gone down.
The United States' Healthcare System
The United States health care functions as a third-party system. The patient asks for a service, the doctor bills the patient’s insurance company, and the insurance company pays the doctor and tells the patient how much they need to pay of the original cost. The insurance company’s services are usually provided by the patient’s employer, since it is cheaper for both the company and employee to have them provided. This is because the government provides a deductible tax to companies that provide health benefits to its employees. The faults that Dr. Flynn finds with these systems are the price mechanism and incentives. The price mechanism, or the way to judge value based on the service, cannot function for the patient since they can only see the price of the service after it was performed. This is because the doctor and the insurance company barter the price between each other, which can take an upward amount of 3 months. The patient has now a way to see if the product will have any value to them before they buy it. This also greatly lowers incentives, especially on the doctor’s side. Since the patient is not the one paying them, the insurance company is, the doctor’s incentive to provide a substantial service is greatly lowered. They only provide enough to keep the patient there. The patient has no incentive to leave, because they are not paying the blunt amount of the original price. The service given and what is expected is greatly lowered due to the intervention of the insurance company. The reason the US spends so much on Medicare is through the deductible tax they pay to companies. The United States is the only country that packages employment with health benefits, as said by Dr. Flynn. I want to point out that simply getting rid of Medicare at this point would not be helpful, or I believe so. Medicare is the way the government helps its civilians pay for the prices of healthcare. If Medicare was removed, customers would be forced to bear the prices of hospice and health care. So, the true problem isn’t that the government is lending a hand in paying for Medicare, its that the health system is not operating properly in the free market. The true problem here is not Medicare, it’s the insurance companies, or at least their involvement. They disrupt the price mechanism which is the core function of the free market.
Singapore's Healthcare System
The Singapore health care system functions in the free market. Dr. Flynn claims that in Singapore, hospitals provide menus for operations, accept on hand cash as pay, and remains top level quality. Hospitals now have the incentive to continue providing high quality services for cheaper prices to keep customers, while customers have the incentive to shop around at different hospitals to find better prices. Because of this, Singapore’s cost of health care is 50%-70% lower than in the United States. However, the Singapore government does not leave its citizens high and dry if they are unable to pay the low prices. They use the 3 M’s as a basis for their healthcare system. The first M is Medisave. This requires each Singapore worker to put certain amount of money annually into a savings account. Similarly to a retirement plan, this saved money then can be used in later years of life when medical situations become more common. However, for emergencies of the present, Medishield is involved. With Medishield, the patient must cover the first $2000 paid toward healthcare. After that, the customer will pay 10% of the cost of any health service. The government’s Medicare takes over the other 90%. This is how the government relieves the consumer without losing the competitive aspect of the market to keep prices down and incentivizing shopping around. However, if the consumer cannot pay for a service after all this, they use Medifund. The Singapore Medifund functions as an untouchable $5 billion trust fund, untouched by politicians. The consumer who cannot afford the service fills out a form, testifying that he cannot afford the service. He receives a grant and can now afford the service. Around 98% of these grants are passed through. The results of this system were that patients in Singapore were just as healthy as the United States. Since they now have incentive to shop around, they would pick cheaper options for services and products. Dr. Flynn said in his lecture that if someone is not bearing the financial burden of a purchase, they will go with the more expensive option even if the results are identical to that of the cheaper option. This means countries like Canada, the UK, and slightly the United States are paying more than they should for healthcare. Dr. Flynn than shows how systems like Singapore can work in the United States, like Whole Foods. The main problem is that not many people are aware of this as an option, since insurance companies lose profit in this kind of system. From his lecture, I believe I have located the main problem with centralized healthcare: Cost/Incentive. With a sensitive area like health, where a bad product or service could result in death, many are concerned with letting the free market handle it as it would other industries. A common wish is for equal and great healthcare for all, which if possible is beautiful. However, equal and great do not function together. For something to be equal across the country, that requires heavy funding which can only be taken out of the country itself. For things to be great, there needs to be a drive towards bettering a product. The driving force behind bettering a product is the fear of losing money, which is what competition provides. If there is a focus on Cost and Incentive, people are allowed to be more personalized in their purchases. They can choose cheaper products that would better suit their wallets and needs.